Gold (XAUUSD) Consolidates as Bond Yields Rise and US Dollar Hits Resistance

Gold (XAU) prices consolidate in tight ranges after the release of a softer-than-expected US inflation report. The inflation data shows mixed signals. The headline CPI for April rose 0.2% month-on-month, below the forecast of 0.3% but higher than March’s -0.1%. On the other hand, the core CPI also increased by 0.2%, below expectations of 0.3%.

However, the chart below shows that the annual CPI came in at 2.3% year-over-year, slightly under the expected 2.4%, while core CPI remained at 2.8%. These figures suggest that inflation remains under control, which reduces the urgency for aggressive Fed action, thereby softening gold’s bullish case.

On the other hand, the US 10-year Treasury yield rose to 4.50%, while real yields held steady. These elevated yields pressure non-yielding assets like gold. Fed rate futures indicate expectations of just 52 basis points of easing by December 2025, signaling two rate cuts. This aligns with the Fed’s previous projections and supports a restrictive monetary stance, which could limit gold’s upside.

However, in April, the People’s Bank of China added 2 tonnes of gold, marking its sixth straight month of accumulation. Poland’s central bank bought 12 tonnes, raising its reserves to 509 tonnes. The Czech National Bank also increased holdings by 2.5 tonnes. This continued accumulation signals long-term confidence in gold and could provide a buffer against short-term volatility from macroeconomic shifts.

Gold (XAU) Technical Analysis

Gold Daily Chart – Inside Bar

The daily chart for gold shows that the price is consolidating between the $3,500 and $3,200 region and is likely to face further correction. The emergence of an inside candle, despite the inflation readings, suggests that gold may drop further before the next move higher.

Moreover, the RSI indicates that gold has remained consistently overbought in 2025 after breaking above the $3,000 region, signaling a need for correction to stabilize the market. Strong support lies around $3,150 at the 50-day SMA, and a break below this level could push prices toward the $3,100 zone.

Gold 4-Hour Chart – Short-Term Price Correction

The 4-hour chart for gold shows that the price remains in a correction phase and is moving toward the red circle, which marks a strong support region. The RSI is currently at the 43 level, indicating further downside potential in gold prices.

Treasury Yields (TNX) Technical Analysis

10-Year Treasury Note Yield Daily Chart – Positive Development

The daily chart for the 10-year Treasury yield shows that yields continue to build positive momentum after a strong consolidation between 4% and 5%. Yields are rising above the 50-day and 200-day SMAs. Moreover, the 50-day SMA remains above the 200-day SMA, indicating sustained bullish momentum. Immediate resistance lies at 4.62%, followed by 4.70% and 4.80%. Strong resistance is seen near the 5% region. On the downside, the 50-day SMA at 4.30% remains a key support level.

10-Year Treasury Note Yield 4-Hour Chart – Positive Development

The 4-hour chart for the 10-year Treasury yield shows that yields reversed higher from the 4.10% support after forming a bullish setup. This reversal is confirmed by an inverted head and shoulders pattern near the 4% region. Strong resistance levels remain at 4.60% and 4.80%.

US Dollar (DXY) Technical Analysis

US Dollar Daily – 50-Day SMA

The daily chart for the US Dollar Index shows that the index has been forming strong bearish price action over the past six months. It remains under pressure after forming a head and shoulders pattern. The recent rebound in the US Dollar following the US-China trade deal is expected to be short-lived. The dollar hit strong resistance at around 101.90 at the 50-day SMA and continues to trade lower.

US Dollar 4-Hour Chart – Descending Channel

The 4-hour chart further highlights this negative trend by showing a descending channel. The index has hit the resistance of this channel at 101.90 and continues to move lower. Immediate support lies between 100.30 and 100.65, and a break below this zone would indicate further downside.